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Daniel Loeb's 5 Biggest Stock Buys of 2nd Quarter

Daniel Loeb (Trades, Portfolio), founder of New York hedge fund Third Point, disclosed the purchase of 16 stocks during the second quarter, the most new positions he has taken in a single quarter in three years.

A filing released Tuesday showed that Loeb took as his largest new positions Centene Corp. (NYSE:CNC), Burlington Stores Inc. (NYSE:BURL), GTT Communications Inc. (NYSE:GTT), Tradeweb Markets Inc. (NASDAQ:TW) and Americold Realty Trust (NYSE:COLD). He also established holdings in several noted online names, such as Pinterest Inc. (NYSE:PINS) and Twilio Inc. (NYSE:TWLO).

The reported portfolio holdings fall in the shadow of the Loeb's more publicized ongoing activist campaigns. Over months, the firm, which describes its investment style as "event-driven" and "value-oriented," has pushed for change at companies where it owns billions of dollars worth of shares, such as Nestle (XSWX:NESN) and Sony (NYSE:SNE). Both investments ranked among six active investments that composed six of its seven top profit contributors, Loeb said in a second-quarter letter.

The quarter saw the end of one of his active investments, with Loeb exiting DuPont de Nemours Inc. (DD) and Dow Inc. (NYSE:DOW) after supporting the creation of the companies through the breakup of DowDuPont completed in June.

Loeb also sold out of American Express (AXP), once one of his largest positions, along with Celgene Corp. (CELG) and Constellation Brands Inc. (STZ).

In addition to buying common stocks, Loeb increased his fund's short positioning this year due to market conditions.

"We also grew our concentrated book of single name shorts and increased some sector and market hedges to dampen volatility and market correlation," Loeb wrote in a second-quarter letter. "Our nets have averaged ~40% this year. We believe that this positioning, late in the economic cycle, allows us to take advantage of market corrections and be poised to shift into credit as opportunities emerge. Of course, it is impossible to predict when the credit cycle will turn. However, given current debt levels throughout the system and the potential for an economic slowdown in the next few years - although we see nothing on the immediate horizon - we believe flexible positioning is appropriate."

Third Point's short book contributed to returns in the first part of the year, but became a detractor in recent months. After returning 3.4% in May, it declined 3.7% in June and 0.6% in July. For the first seven months, Loeb's Third Point Offshore Fund returned 15.7% versus a 20.2% rise in the S&P 500 index.

GuruFocus data shows that the long book of 42 positions was valued at $8.54 billion at the end of the second quarter, with the highest concentrations in health care stocks at 35.82%, industrials at 15.59% and consumer cyclical at 13.55%. Third Point has $14.4 billion in assets under management.

Centene Corp. has a market cap of $20.57 billion; its shares were traded around $49.73 Tuesday with a price-earnings ratio of 16.34 and price-sales ratio of 0.30. Centene Corp. had an annual average earnings growth of 21.80% over the past 10 years. GuruFocus rated Centene Corp. the business predictability rank of 3-star.

Burlington Stores Inc. has a market cap of $11.58 billion; its shares were traded around $174.44 with a price-earnings ratio of 29.15 and price-sales ratio of 1.77. Burlington Stores Inc. had an annual average earnings growth of 54.40% over the past five years.

GTT Communications Inc. has a market cap of $512.890 million; its shares were traded around $9.10 Tuesday with and price-sales ratio of 0.32. GTT Communications Inc. had an annual average earnings growth of 43.60% over the past five years.

Tradeweb Markets Inc. has a market cap of $10.11 billion; its shares were traded around $45.48 Tuesday with a price-earnings ratio of 143.81. The trailing 12-month dividend yield of Tradeweb Markets Inc. is 0.17%. The forward dividend yield of Tradeweb Markets Inc. is 0.70%.

Americold Realty Trust has a market cap of $6.79 billion; its shares were traded around $35.43 Tuesday with a price-earnings ratio of 98.03 and price-sales ratio of 3.32. The trailing 12-month dividend yield of Americold Realty Trust is 2.18%. The forward dividend yield of Americold Realty Trust is 2.26%. Americold Realty Trust had an annual average earnings growth of 8.30% over the past five years.